The Many Faces of Energy Poverty in Canada

A climate emergency, increasing disparity and poverty, the housing crisis. These complex and intractable issues are challenging livability in Canadian cities. They are interrelated, and intervention strategies for one impact the others. By understanding and addressing energy poverty, policymakers can advance progress on a number of these critical priorities and ensure we “leave no one behind” in the low-carbon transition.

What is energy poverty?

Energy poverty refers to the experience of households or communities that struggle to heat and cool their homes and power their lights and appliances. Those in this situation face multiple challenges and impacts, including:

  • Discomfort from living in cold and drafty homes.
  • Disruptions from abrupt utility shutoffs, such as inability to cook and spoiled food.
  • Sacrificing other essentials such as groceries and medication in order to keep up with energy bills.
  • Increased incidence of respiratory illness in children and infants.
  • Higher stress and poor mental health outcomes for adults.
  • Difficulty participating fully in community life.

How do we measure energy poverty?

Researchers can measure energy poverty using one or more metrics when available, including home energy costs relative to household income, subjective reporting of comfort, access to the electricity grid or clean energy technologies, and occurrence of utility disconnection. Many of these metrics, while attainable in Europe, are not available in Canada where the issue of energy poverty is nascent. As a result, the Canadian Urban Sustainability Practitioners (CUSP) and Canadian academics rely on home energy cost burden as the proxy for measuring energy poverty. Using this metric, households that shoulder disproportionate home-energy cost burdens are said to be experiencing energy poverty.

Home energy cost burdens are reported as the percentage of total after-tax household income that is spent on home heating and electricity. For most Canadians, this value is below 3 per cent, which is to say that the median Canadian household spends less than 3 per cent of its after-tax income meeting its home energy needs.

Households that spend more than twice this value on home energy services, can be said to experience high home energy cost burdens. For purposes of policy discussion, CUSP uses this 6 per cent threshold of home energy cost burden to define households that experience energy poverty.

Using 2016 Census data, the CUSP Energy Poverty and Equity Explorer tool enables users to visualize different levels of home-energy cost burdens, along with other variables such as housing quality and affordability indicators, income and poverty status indicators, and racialization indicators at various geographical scales.

Who faces energy poverty?

There is no “typical” scenario or single cause. Energy poverty affects households with diverse income ranges, and individuals who live in a variety of housing types all across the country. (Our Energy Poverty Backgrounder offers additional insights.)

CUSP’s preliminary analysis of energy poverty rates among racialized, recent immigrant, and Indigenous households indicates that the impacts of structural racism are evident in the higher rates of energy poverty likely to be experienced by traditionally marginalized communities. No one single factor is driving this trend, but the disproportionate incidence of energy poverty underscores the need for an intentional response to address racial inequities.

Where is energy poverty most prevalent?

Though Canadian policy makers and researchers acknowledge energy poverty to be a significant challenge, particularly in Atlantic Canada, to date they have lacked the means to measure it, understand it, and identify other areas and groups where it is prevalent. To address this data and knowledge gap, in 2019 CUSP developed the Energy Poverty and Equity Explorer tool.

The tool, linked below, allows policy makers to explore and understand the prevalence and extent of energy poverty in different neighbourhoods, cities, and provinces. By measuring energy cost burden alongside the existence of drivers and characteristics–such as housing age, type, condition and affordability, household income, and poverty–policy makers and program managers can more effectively target, address, and overcome its root causes.

The tool also includes demographic data that will allow policymakers, program managers, and advocacy organizations working in climate action, poverty reduction and social justice to investigate the extent to which energy poverty is exacerbating existing inequities and quality of life challenges for traditionally underserved communities. These energy poverty and equity indicators are available at various geographic scales as granular as the neighbourhood in urban areas.

Energy Poverty and Equity Explorer Tool

energy poverty and equity explorer tool

Cautions and Limitations

Small and Indigenous Communities

To protect the privacy of residents, the Census of Canada excludes information for very small rural communities. The Census also does not collect data from some Indigenous communities. As a result, the tool does not reveal information for these communities. This is important to note because many of these communities, particularly northern communities that are not connected to the electricity grid or natural gas network, tend to experience some of the nation’s highest home energy cost burdens.

Renters Versus Owners

Exploring the data in the mapping tool might suggest, in most geographies, that renters are less likely to experience high energy cost burdens than homeowners. This is true for renters as a group. However, renters include two distinct groups: those whose rent includes at least part of their utility costs and those are who are responsible for all their own utility costs. Analysis of the data in the custom tables acquired for this project suggests that while renters as a group are less likely than homeowners to experience high home energy cost burdens, renters whose rent does not include any portion of their utility bills are more likely to have high home energy cost burdens.

Transportation Costs

Household energy poverty and energy cost burden metrics typically exclude transportation costs because governments tend to address these two types of cost burdens separately. Additionally, the Census does not track transportation costs, so the Energy Poverty and Equity Explorer tool cannot report these costs. Future iterations of the tool will provide proxies for transportation cost burdens for this variable to guide those interested in exploring transportation and home energy affordability variables together which may be preferable for those working on climate action and poverty reduction. Transportation data expected to be added by early 2020. Subscribe to this website for this and other anticipated updates (single parent households also coming in early 2020).

Unexpected or Counterintuitive Results

The Energy Poverty and Equity Explorer may return unexpected, even counterintuitive results. For example, the tool highlights high home energy cost burdens in largely affluent communities, such as the District of West Vancouver. This may be the result of individuals who report low incomes, such as seniors living on fixed incomes and in very large detached homes. We recommend practitioners access local knowledge to interpret such results.

Data Sourcing Diversity

CUSP produced the Energy Poverty and Equity Explorer tool to create visibility and generate conversations around energy poverty and inform clean energy program design and other climate action and equity strategies. We do not recommend using the tool in isolation or as a replacement for local conversations. We believe conversations with citizens and communities will reveal the best insights and the most strategies; the tool can help establish greater understanding and make these local conversations more productive and insightful.